KY lawmakers advance bill to lower taxes for bourbon industry

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Published: Mar. 13, 2023 at 6:35 PM EDT
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FRANKFORT, Ky. (WYMT) - Kentucky lawmakers are advancing a controversial bill to lower taxes for the bourbon industry.

Those in support of the bill said it’s needed to preserve jobs and the state’s signature industry.

Those against it said loss of those taxes will hurt county governments and public protection.

Some sheriffs in counties where large bourbon distilleries operate fear what the future may bring.

“The worst part is the great relationship we have with our distilleries,” said Anderson County Sheriff Joe Milam. “It’s always been so good. That’s going to go way.”

House Bill 5 passed the budget committee 19-2 with 3 members passing. It would do away with the property tax distilleries pay.

“Startups that produce bourbon must pay taxes on their aging barrels,” said Andrew McNeill with The Bluegrass Institute. “For years before putting their first bottle of bourbon on a shelf.

If this bill does get through the legislature and is signed into law by Governor Beshear, it will not take effect until 2026, with the final tax cut coming in 2039.

Fire officials said county departments also depend on the revenue that comes into the fire districts.

“The cost of suiting up a firefighter these days is about $21,000,” said Rick Bobo with the Firefighters Association. I could go on and on about how the costs have risen. Diesel fuel is through the roof.”

The bill was voted on in committee at 2 p.m. on Monday, then the full House passed it several hours later, 59 to forty.

“Phasing out the barrel tax creates certainty that the industry needs to continue investing in our state,” McNeill added. “Future investment will draw growth in other revenue sources generated by the industry. New distilleries create new opportunities.”

The bill still has to clear the Senate and be signed into law by the governor.